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Jean-Claude Trichet was head of the ECB between 2003 and 2011 Press Association/AP

Breakthrough: Jean-Claude Trichet could take part in the banking inquiry after all (sort of)

And you can thank Enda Kenny if he does.

Updated 5pm 

THE FORMER HEAD of the European Central Bank (ECB), Jean-Claude Trichet, has indicated he would be willing to cooperate with the banking inquiry in some form having previously stated he could not.

The ECB’s refusal to cooperate with the Oireachtas committee investigating the causes of the Irish banking crash has caused controversy with the bank insistent that its legal responsibility is to the European and not the national parliament.

But in a letter to the inquiry, Taoiseach Enda Kenny has said he recently raised the matter with both Trichet and his successor Mario Draghi.

According to Kenny’s letter, Trichet has indicated that while it is not legally possible for him to go before a national parliamentary committee he could meet with Irish MEPs in Brussels to answer any relevant questions or an appropriate Irish institution or third party could invite him to Dublin where he could respond to questions.

The 11 TDs and Senators charged with investigating the collapse of the Irish banking system view Trichet as a key player.

He opposed the idea of burning Anglo bondholders and is said to have forced Ireland to issue a blanket guarantee of all assets and liabilities in the banking system.

‘Positive progression’

Speaking today, committee chairman Ciarán Lynch said it was “a positive progression from the ECB’s previous position” while noting that the inquiry itself had not yet received a response from the Frankfurt-based bank. 

“I have always said that this is not about individuals or personalities but about the information that the ECB would make available to the Committee to assist us in our work,” he said. 

honohan-2-2 The banking inquiry in session. Oireachtas TV Oireachtas TV

“What we are seeking is a methodology with the ECB which gives the Committee information to clarify the positions that the Institution took during Ireland’s banking crisis in order to provide the Irish public with the fullest picture.

“Many pieces of the jigsaw of the financial crisis remain to be put in place, for example, the two years and two month period between the time of the guarantee up to the entry into the bailout programme and what engagement or role the ECB had with the Irish State during this time.”

‘Totally inadequate’

However, one of the two Fianna Fáil inquiry members, Michael McGrath, said that the ECB’s response is “totally inadequate”.

He explained: “As I understand it the members of the inquiry can only consider the evidence that is presented directly to them when they come to write their report.

“Therefore any information that is put forward outside the terms of the inquiry itself is immediately devalued and its admissibility as evidence must be seriously open to question.”

Fine Gael TD John Paul Phelan welcomed the move by Trichet but said that the bank should publish the legal advice that it cannot appear before the committee itself.

“I think many people in Ireland will find it difficult to understand how Mr Draghi broke no laws in speaking to a German Parliamentary committee as he did in 2012, but now has legal advice saying the ECB can’t speak to an Irish parliamentary committee,” the Carlow-Kilkenny deputy said.

In a further boost for the inquiry, a bill designed to give it access to confidential Central Bank documents is before the Seanad today and is due before the Dáil next week.

First published 3pm

Previously: Sorry Ireland, Draghi says the ECB won’t be fronting the banking inquiry

Read: These are the letters sent between Brian Lenihan and the ECB before the bailout

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26 Comments
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    Mute Max Rockatansky
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    Jan 22nd 2015, 3:04 PM

    He looks like the emperor from Star Wars in that pic

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    Mute Bobby Moore
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    Jan 22nd 2015, 3:06 PM

    Only more evil.

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    Mute Juan Venegas
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    Jan 22nd 2015, 4:08 PM

    I arrived to late to say it, but its obvious

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    Mute Juan Venegas
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    Jan 22nd 2015, 4:09 PM

    Just like the Emperor said before he died “Fool, only at the end do you understand, and now, you will die!”

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    Mute rory conway
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    Jan 22nd 2015, 4:56 PM

    Juanito , it just shows the value of Enda going to Davos. Great achievement ! Get Trichet !

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    Mute rory conway
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    Jan 22nd 2015, 4:56 PM

    “Juan”

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    Mute Oliver Curley
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    Jan 22nd 2015, 5:31 PM

    Apt

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    Mute Shayno O'Donnchadha
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    Jan 22nd 2015, 5:40 PM
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    Mute WarningBeaconsofÉire
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    Jan 22nd 2015, 6:32 PM

    Juan,

    Emperor? pah, that’s for peasants, he and his Goldman Sachs buddies are far greater and higher than mere mortal labels. Members of god’s “Chosen Ones” don’t you know.

    11
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    Mute Leslie Skinner
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    Jan 22nd 2015, 3:09 PM

    Is anyone going to jail, after it, nah I don’t think so.Only going to cost the tax payer more money,they should be in the criminal courts,facing huge sentences

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    Mute Kerry Blake
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    Jan 22nd 2015, 3:07 PM

    Enda claiming he has a commitment from someone from Europe? Think that claim can be filed under seismic shifts.

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    Mute The SinisterFringe
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    Jan 22nd 2015, 4:06 PM

    Good opportunity to arrest him if he arrives in Dublin. He is an economic terrorist.

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    Mute Mick Curtin
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    Jan 22nd 2015, 4:04 PM

    Nothing changes. What a joke! Geitner spoke out of both sides re Ireland’s stance on potentially burning bond holders: when the prospect first arose, he was fully against it but a good while after the horse had bolted, he faithfully uttered that we were stupid to bail them out. Then Honohan claims we shouldn’t have touched Anglo and instead have left it rot off. Now Kenny insists NOTHING will be done re write downs. Brilliant, Mr Taoiseach – who do you serve? Not the people. We should get out of this corrupt club now that the Euro will be worth less after Draghi’s expected QE move.

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    Mute Bondage Informer
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    Jan 22nd 2015, 4:17 PM

    You must free yourself from the bondage of THEIR money system if you want to be free.

    Your ignorance of its corruption and fraud if what ensures your compliance.

    If you do not resist additional taxes and extortions to pay for their ongoing crime which continues to this day then you will gift to them complete global domination.

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    Mute Mick Curtin
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    Jan 22nd 2015, 4:19 PM

    Trichet is just another economic sleazeball with a none-too-clean record . Justice might be seen to be done with no punishments. I wouldn’t thank Kenny for anything.

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    Mute Ronan Flanagan
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    Jan 22nd 2015, 5:05 PM

    Now that they have our money burnt they’ll tell us anything, what a despicable bunch of fools running Europe

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    Mute leartius
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    Jan 22nd 2015, 4:45 PM

    How many children with cancer could we have helped with 5.8 million euros instead of putting on this panto. After only a month they are running out of people to blame or maybe now that a coalition with FF is in the offering. they must ease the blame game on their next junior partners in goverment. Enda K still has not explained how the letter was found or how people from his dept are not giving evidence to the enquiry? Why he needed to place two more members onto the committee so that that truth will never come out. As that old saying goes ” How can I soar like an eagle, when I’m flying with turkeys…..”

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    Mute james r
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    Jan 22nd 2015, 4:16 PM

    Waste of money …

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    Mute rory conway
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    Jan 22nd 2015, 4:58 PM

    James R , did you not complain when he said he would not at all contribute ? Like other contributors now complaint about this development .

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    Mute Dermot Ryan
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    Jan 22nd 2015, 10:34 PM

    Look up the word – Pander , Rory ….

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    Mute chris smith
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    Jan 22nd 2015, 5:08 PM

    What is the point???? To throw a few more quid at the rich lawyers?
    Will any one be punished??
    Ohh but we will learn a valuable lesson blah blah blah f;(k off Enda

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    Mute Shayno O'Donnchadha
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    Jan 22nd 2015, 6:28 PM

    I hope they get him over here soon, he doesn’t look like he has long left..

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    Mute Dermot Ryan
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    Jan 22nd 2015, 5:27 PM

    Duress !
    Where’s the arrest warrant ?

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    Mute Affinity
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    Jan 22nd 2015, 11:15 PM

    Why do we need this man who stabbed each and everyone of us is now asked to rub salt into wounds caused by FF, FG, their lap dog extension party and the Greens. He will blame the public – no banker no politician only the irish people.

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    Mute Michael Sands
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    Jan 23rd 2015, 1:03 AM

    “The Role of the European Central Bank in the Financial Crash and the
    Crisis of the Euro-Zone”
    Report based on a WEED Expert Meeting Franziska Richter Peter Wahl
    Published by: WEED – World Economics, Environment & Development Assoc.
    Eldenaer Straße 60
    D-10247 Berlin
    2011
    “4
    1. Introduction
    The European Central Bank (ECB) is one of the most important actors in the financial crisis and the sovereign debt crisis in the Eurozone. However, there is almost no attention of civil society NGOs, trade unions, social movements for this key player. It is the purpose of this report to trigger more interest for what the ECB is doing, because its behaviour and its decisions are not only affecting heavily the financial sector but the entire economy and hence wages, social systems and in the end the every day life of all citizens. The way, how the ECB was operating before the crisis was strictly based on the monetarist concept of central banking, reducing central banks to the guardian of consumer price inflation. Already the inflation of financial asset prices was ignored, not
    speak of systemic financial stability, growth and employment.
    It is therefore not surprising that the ECB did not see the crisis coming. In early July 2008, when the US subprime crisis was already ravaging and some European banks such as the German IKB had collapsed, the ECB decided an increase of the interest rate to the historic high of 4,25%. An extraordinary case of blindness of such an institution vis à vis the reality.
    After the Lehmann collapse the ECB made however a surprising turn. It played the role of a lender of last resort to the banks in trouble, although being very generous and allowing a lot of windfall profits. The ECB also broke with some of its own rules by giving indirectly money to governments under stress through the purchase of government bonds at the secondary market.
    There are some basic faults in the design of the ECB. The most important are: its monetarist obsession with consumer price inflation and its completely undemocratic, non-transparent and unaccountable status in the institutional arrangement of the EU.
    Of course, inflation is an issue to be taken serious, but reducing the role of central banking to the one and only function of inflation targeting reflects a dogmatic point of view, which with the financial crisis has definitively proven to be flawed.
    The financial crisis has been transformed into a sovereign debt crisis, which is threatening not only Greece, Portugal and Ireland. The future of the Euro as the common currency of 17 European countries is at stake, and hence the future of the central bank for this currency. The traditional receipts of structural adjustment with painful austerity programs for the ordinary people don’t’ work, as the case of Greece demonstrates. In spite of dramatic reductions in public spending with highly negative consequences for future growth perspectives, the debt burden is increasing. The crisis is far from being over. New and innovative ways out of the crisis have to be found. This means also, that the ECB cannot continue with business as usual. Substantial changes are required, otherwise the collapse of the Eurozone will be inevitable.
    This report is trying to put the future role of the ECB as part of an overall alternative to the present crisis management on the agenda of civil society. Of course, it cannot discuss exhaustively all the issue of central banking. Its main purpose is to draw attention of civil society, that without changes in central banking it will not be possible to establish a fairer, more stable, sustainable and equitable economic order in the EU.
    The report is based on the European Expert Meeting “The role of the European Central Bank in the Financial Crash and the Crisis of the EuroZone” which took place in Berlin on April 12th 2011, organised by WEED.
    The main speakers were: Marica Frangakis, Poulantzas Institute, Athens, Dominique Plihon, University of Paris, Mario Tonveronachi, University of Siena, Lucas Zeise,
    Financial Times Germany. The report draws very much on their inputs. Errors in this report are, however, at the sole responsibility of the authors of the report. Also more than 20 German and international participants contributed to the discussion with their expertise coming from universities, trade unions, research institutes, civil society organisations, political foundations, parties and parliaments.
    The paper summarises the discussions of this meeting. While opinions differed on
    some issues see in particular chapter 7 all participants agreed upon the fact that the ECB’S mandate, tasks and instruments as well as its role in the new financial architecture need to be substantially reformed.”

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    Mute Michael Sands
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    Jan 23rd 2015, 1:05 AM

    ttp://www.globalmarshallplan.org/sites/default/files/media/ecb_report_by_weed.pdf

    “Executive Summary
    The European Central Bank (ECB) is one of the most important actors in the Financial Crisis and the sovereign debt crisis in the Eurozone. The way, how the ECB was operating before the crisis was strictly based on the monetarist concept of central banking, reducing central banks to the guardian of consumer price inflation. Inflation of financial asset prices was ignored,not to speak of financial stability, growth and employment. This reflects basic faults in the design of the ECB, in particular its monetarist obsession with consumer price inflation and its completely undemocratic, non transparent and unaccountable status in the institutional arrangement of the EU.
    The report makes a critical assessment of the ECB’s role before the financial crisis and identifies it as a player, which contributed with its monetarist approach even to a certain extent to crisis. After the ECB had recognized that there was a crisis, it made a pragmatic Keynesian crisis management, serving as lender of last resort with some biases toward the interests of the financial industry and started indirect government financing. However, at present (April 2011) it is unclear whether this is a signal towards a paradigmatic change. The attitude of the ECB in the European debt crisis points into another direction. The report also compares the main features of the ECB with the US Federal Reserve Bank, the Bank of Japan and the Bank of England. The conclusion is, that the ECB represents more than its homologues a pure monetarist approach to central banking.
    Several proposals for reform are discussed such as a role for central banking in combating asset price inflation and macro prudential regulation, control of credit expansion at macro level, mitigating exchange rate volatility and government funding. Also more transparency and democratic accountability are. While there was a consensus, that the proposals all reflect desirable goals, it was controversial whether a broadening of the mandate and competences of the ECB would not give too much power to this institution and that many of desirable tasks infinancial governance could not be better done through other institutions and instruments.The crisis and the debate on reforms present a window of opportunity to push for alternative visions of the central banking in Europe.”

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